UE E&C, an established M&E engineering and construction company, launches S$33.6 million IPO on SGX Mainboard

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1 NEWS RELEASE UE E&C, an established M&E engineering and construction company, launches S$33.6 million IPO on SGX Mainboard Offers 70 million shares at S$0.48 per Offering Share Plans to expand its business in Singapore and overseas SGX Mainboard-listed United Engineers Limited will continue to have majority control of UE E&C immediately post-listing SINGAPORE, 15 February 2011 Established Mechanical and Electrical ( M&E ) engineering and construction company, ( 优异程建有限公司 ) ( UECL, together with its subsidiaries and associated companies, the Group ), a subsidiary of SGX Mainboard-listed United Engineers Limited ( UEL ), today announced its initial public offering ( IPO or Offering ) of 70 million shares in the capital of UECL ( Offering Shares ) at S$0.48 each, in conjunction with its listing on the Mainboard of the Singapore Exchange Securities Trading Limited ( SGX- ST ). Oversea-Chinese Banking Corporation Limited ( OCBC Bank ) is the issue manager, underwriter and placement agent for the IPO.

2 Page 2 of 7 The Offering The Offering comprises 70 million Offering Shares representing approximately 25.9% of UECL s enlarged post-offering share capital of 270 million shares. Out of the 70 million Offering Shares, 10 million Offering Shares are available to the public for subscription, while the remaining 60 million Offering Shares are allocated for placement. In connection with the IPO, UECL has granted to OCBC Bank an over-allotment option of up to an aggregate of 10.5 million additional new shares, representing 15% of the total number of Offering Shares. At S$0.48 per Offering Share, the historical price earnings ratio based on the Group s historical net earnings per share for the financial year ended 31 December ( FY ) 2009 is 3.1 times. The IPO will open at 9.00 a.m. on 16 February 2011 and close at noon on 22 February Trading of UECL s shares is expected to commence on a ready basis at 9.00 a.m. on 25 February Strong and Established Track Record in M&E Engineering and Construction The Group has more than 25 years of track record in the M&E engineering business and almost 30 years of experience in the construction business. The Group is also a leading contractor in Brunei, with more than 20 years of construction and civil engineering track record in Brunei for both government and private building and infrastructure projects. The Group provides a broad range of M&E engineering services, including high and low-voltage electrical distribution, air-conditioning and mechanical ventilation systems, as well as fire protection and alarm systems. The Group s M&E engineering division has successfully completed a wide range of M&E engineering projects for residential, industrial, commercial and institutional projects, including the Changi Water Reclamation Plant, ION Orchard and Marina Bay Sands Integrated Resort. While the main focus of its M&E engineering business is in Singapore, the Group also has M&E engineering projects in Vietnam and is looking to increase its presence there. Some of its recent

3 Page 3 of 7 projects in Vietnam include the Hanh Phuc International Women & Children Hospital and the Marble Mountain Beach Resort in Danang. On the construction front, UECL, through its principal construction subsidiary in Singapore, Greatearth Construction Pte Ltd ( Greatearth Construction ), and United Engineers (B) Sdn Bhd ( UE Brunei ) in Brunei, provides a wide spectrum of integrated construction services, comprising design and build, civil works and general construction for residential, industrial, commercial and institutional buildings as well as infrastructural works. Some of its recent construction projects include Biopolis, Fusionopolis and One-North MRT station, Sembawang Shopping Centre and One Jervois in Singapore, as well as the Istana Darul Hana and houses for the National Housing Scheme at Kampong Meragang in Brunei. Other Complementary Businesses In recent years, UECL has also engaged in property development in the private residential and public housing sectors (through Design, Build and Sell Scheme ( DBSS ) and Executive Condominium ( EC ) projects of the Housing Development Board ( HDB )) by taking minority stakes 1 in joint ventures in Singapore. By participating in property development, the Group is able to exercise greater control over the project which will allow it to minimise inefficiencies and achieve cost savings. At the same time, the Group can enjoy any potential upside from the sale of the property units, which it would otherwise not enjoy in its capacity as a contractor. To date, the Group s property development projects comprise its first DBSS project, Park AMK; its first EC project, Austville Residences; as well as private residential projects, Kovan Melody and Ascentia Sky. 1 Other than the DBSS project, Park AMK, which is developed by Greatearth Developments, a 50:50 joint venture between our subsidiaries, Greatearth Construction and United Engineers Developments Pte Ltd

4 Page 4 of 7 UECL also rents and supplies metal forms and industrial equipment, and supplies tiles. One of its subsidiaries, UE-Tradetec (Singapore) Pte Ltd ( UE-Tradetec ), has been renting and supplying metal forms for HDB projects since Another subsidiary, UE-IBP Building Materials Pte. Ltd., supplies tiles for construction projects including some of the Group s construction projects. The Group s subsidiaries, UE-Tradetec and Anhui Anxin Energy Co., Ltd., are total power solution specialists to the construction, mining, manufacturing, shipbuilding, ship repair and marine industries that require emergency, immediate and uninterrupted power supply. Competitive Edge UECL has a highly qualified and experienced management team, each with more than 15 years of experience in construction, engineering, operations or finance, and some of whom have been with the Group for more than 15 years. It is helmed by Chief Executive Officer ( CEO ), Mr Chua Hock Tong ( 蔡发忠 ), who set up Greatearth Construction in 1981 and has over 30 years of experience in the construction industry, together with Deputy CEO, Mr Chan Tuck Lee ( 陈德利 ), who is a registered Professional Engineer in Singapore and Malaysia and has over 30 years of experience in the engineering and construction industries. The Group has developed strong and longstanding relationships with its customers, suppliers and sub-contractors with its strong track record and reliability. Some of its customers such as the Wing Tai group, the CapitaLand group and the Frasers Centrepoint group have been its business associates for more than 10 years. Elaborating on the Group s competitive edge, Mr Chua says, We believe that our combination of M&E engineering and construction services will better position us to take on larger and technically more complex building projects and therefore provide us with a distinct competitive advantage. By pairing the M&E engineering and construction businesses, we can provide customers with a more integrated solution across the value chain. For future projects, we will continue to submit joint tenders to construct new projects and then outfit the same projects with

5 Page 5 of 7 our M&E engineering systems. This strategy offers us the scope to better control our costs, while at the same time, improve our quality and delivery time. Immediately post-listing, UEL will continue to retain majority control of UECL. UECL plans to continue to leverage on the reputation and close to 100-year track record of the United Engineers brand, and participate in the property development projects of UEL, its subsidiaries and associated companies ( UE Group ). Recently, the Group has successfully tendered for both the M&E engineering and construction contracts for UE BizHub EAST and the M&E engineering contract for the proposed redevelopment of the former Specialists Centre and Hotel Phoenix and the proposed underground pedestrian walkway under Orchard Road, for which the UE Group is the property developer. Business Strategies and Future Plans UECL believes its growth will be driven by domestic growth in public works projects as well as regional growth in infrastructure investments. According to the Building and Construction Authority ( BCA ), the average annual construction demand for 2011 and 2012 is expected to reach S$18 to S$25 billion, mainly comprising S$10 to S$14 billion in public sector construction projects 2. In Brunei, many new infrastructure projects have been approved under Brunei s current National Development Plan , which has allocated approximately BN$3.2 billion (approximately S$3.2 billion) for the development of roads, government housing, public facilities, national housing, sanitation, water supply, civil aviation and marine and ports 3. The Group is currently exploring the possibility of building its green technology capabilities such as the supply and installation of solar panels and the distribution of more hygienic and energysaving air-conditioners. 2 Source: BCA s media release dated 13 January 2010 and entitled Public Sector Projects Boost Construction Demand Outlook in Source: Brunei Department of Economic Planning and Development of the Brunei Prime Minister s Office, Brunei 9th National Development Plan ( )

6 Page 6 of 7 At the same time, it also plans to expand its power solution business, including acquiring more units of large capacity power generators, to provide a wider range of product offerings and expand its customer base in Singapore, the region and the People s Republic of China. While Singapore will remain the Group s core market for business, UECL believes that Vietnam and Middle East offer good growth potential for its M&E engineering business. It intends to increase its presence in Vietnam through its subsidiary, United Engineers (Vietnam) Limited, and to establish a branch office in Abu Dhabi to grow its presence in the Middle East. Financial Highlights The Group s revenue rose from S$249.6 million in FY2007 to S$394.8 million in FY2009, while its net profit grew from S$7.5 million to S$31.0 million in the same period. For the half year ended 30 June 2010, the Group registered net profit of S$15.1 million, against revenue of S$184.5 million. As at the Latest Practicable Date on 17 December 2010, the Group s order books, based on secured contracts, amounted to approximately S$631.8 million. Barring unforeseen circumstances, it expects a majority of the orders to be fulfilled over the next 12 to 36 months. Use of Proceeds The Group plans to use its net proceeds from the IPO for the following purposes: approximately S$15.0 million to fund property development projects undertaken in connection with its construction business; approximately S$8.0 million to fund its expansion by way of joint ventures, acquisitions of, and investments in, related business; approximately S$5.0 million to expand its power solution business; and approximately S$0.7 million for working capital purposes. # # #

7 Page 7 of 7 For more information, please contact: United Engineers Limited David LIM davidlim@uel.sg Corporate Communications & Investor Relations DID: HP: This press release is made in reliance on Section 251(8) of the Securities and Futures Act, Chapter 289 of Singapore, and does not constitute an offer, invitation or solicitation to subscribe for the shares in UECL (the UECL Shares ) in Singapore or any other jurisdiction nor should it or any part of it form the basis of, or be relied upon in any connection with, any contract or commitment whatsoever. The information in this press release is qualified in its entirety by, and is subject to, the more detailed information set out in the prospectus dated 15 February 2011 (the Prospectus ) registered by the Monetary Authority of Singapore. The information presented in this press release is subject to change. Copies of the Prospectus relating to the Offering may be obtained, subject to availability, from OCBC Bank. Anyone wishing to purchase the UECL Shares should read the Prospectus before deciding whether to purchase the UECL Shares and will need to make an application in the manner set out in the Prospectus. Any decision to purchase the UECL Shares should be made solely on the basis of information contained in the Prospectus and no reliance should be placed on any information other than that contained in the Prospectus.